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Technical Outlook: Bitcoin broke a multi-month consolidation pattern off the December record highs with an objective break of the monthly opening-range lows / slope support unleashing a 30% sell-off in prices. The decline has taken out confluence support at 11160 with a near-term confluence support-zone eyed at 8354-8729. This is the first major hurdle for the sell-off and IF price is going to rebound, this would be the spot to look.

Notes: A closer look at near-term price action highlights a rebound today off the 61.8% retracement of the September advance at 9303 with price broadly trading within the confines of a descending pitchfork formation. Subsequent support targets rest just lower at 8643-8729 backed by 8337- both areas IF reached would be of interest for near-term exhaustion / long-entries. A break / daily close below this threshold would risk considerable losses with such a scenario targeting the 200-day moving average around ~7138.

Interim resistance stands at 11160 backed by 11978 – and area of interest for re-entry on the short-side. Near-term bearish invalidation stands with the upper parallel at 13074- ultimately, a break above 15338 would be required to mark resumption of the broader uptrend.

Bottom line: the immediate decline is at risk as we approach near-term structural support with a rebound in price to offer more favorable short-entries targeting the aforementioned support targets. From a trading standpoint, look for signs of a near-term exhaustion low in price for the rebound - but ultimately looking lower.

A summary of IG Client Sentimentshows traders are net-long Bitcoin- the ratio stands at +2.76 (73.4% of traders are long) – bearishreading

The percentage of traders net-long is now its lowest since Jan 2nd; Bitcoin traded near 14697

Long positions are 2.3% lower than yesterday and 13.7% higher from last week

Short positions are 39.9% higher than yesterday and 37.5% higher from last week

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Bitcoin prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current Bitcoin price trend may soon reverse higher despite the fact traders remain net-long.

Leveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors. We advise you to carefully consider whether trading is appropriate for you based on your personal circumstances. Forex trading involves risk. Losses can exceed deposits. We recommend that you seek independent advice and ensure you fully understand the risks involved before trading.

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